PER Aspera ad Astra proclaimed the plastic sign of the Alex Company of Azerbaijan, whose collapse last week was the first tremor in a potential financial earthquake in this small Transcaucasian republic. Few in the disgruntled crowd of empty-handed depositors at the Alex Company's locked-up offices in a restored bazaar in Baku's old quarter can have known the poetic truth of the motto, roughly translatable as 'A Rough Passage to the Stars'.

'I sort of knew this would happen,' said rueful local television producer Rahim Sadikbeyli, who gave 1m manat ( pounds 738) about 10 months' wages, to the Alex Company in April and has not seen a penny of interest since. Just as Russians have been dazzled by the share price rise in the now-tottering MMM enterprise, Azeris have busily been investing in schemes which promised 30 per cent per month returns. Few outsiders doubt that most are pyramid schemes in which unscrupulous, unlicensed bankers pay earlier depositors' interest with the income from new depositors.

But the Azeri enterprises have been even more ambitious than the Russians. They run newspapers and one has even entered politics with a 'Democratic Enterprise Party.' Their popularity is such that one deposit-taker, Huseyinaga Hasimov, has been proposed for president from the floor of the Azeri parliament.

Unlike the MMM chief who refuses to give interviews, Mr Hasimov of Azerbaijan's Vahid Company, which claims nearly a quarter of the population as customers, was eager to open the doors of his three-storey headquarters. Long lines of depositors kept at bay with barricades of benches testified to Mr Hasimov's flourishing business. Toughs with the latest in American walkie-talkies ushered visitors inside. Guns may not be far away. Mr Hasimov, 33, is a former painter, but many sources say his staff are mostly former members of the Azeri KGB.

Mr Hasimov sat at the end of a long desk with video monitors trained on entrances and tills. His friendliness was not matched with a Western concept of disclosure. 'Our deposits are a secret. No banker says how much money he has. If I said it, we would be finished. Let's just say the money collects its own interest.' How could his two-year-old company fulfill its promise to turn a 1m manat deposit into 24m manat in 12 months, far above the rate of inflation? By buying goods cheap abroad and selling them in Azerbaijan, answered Mr Hasimov.

Such are the fortunes being made in the early days of Azeri capitalism that many are ready to believe such talk. Few think about the fact that the Azeri manat has been solid against the dollar for the past two months, the result of an end to cheap government credits to industry and a failure to get banknotes printed fast enough abroad. Azeri state savings banks have even been forced to compete for funds and now offer 10 to 20 per cent a month. The debate about interest and investments has become the number one topic of conversation in the country.

'Our people are sick with their problems. They can't even get salaries. So they sell everything and put it in the bank and get their money. But it is very dangerous. We need another three-four years to establish our institutions,' said a young aide in the presidency.

Mr Hasimov's operation calls itself a charity, donates things like milking machines and calls its publication a 'humanitarian newspaper'. It is a ploy that works well in a country whose workers and pensioners are still reeling from the loss of an all-embracing state.

Mr Hasimov's most successful device has been an offer of coupons to all depositors, allowing them to buy discounted imports at his shops to the value of their deposits. Even more miraculously, they will then be given back 80 per cent of the money they spent at the end of the month. 'It's my advantage, my private system. I won't say how I do it, because I don't want any competition,' Mr Hasimov said.

As with Russia's MMM, wiser heads feel that the whole pyramid may soon come crashing down.